2017-02-01                     Senate Journal                      Page 0150
SB 43                                                                                                                         
SENATE BILL NO. 43 BY THE SENATE RULES COMMITTEE                                                                                
BY REQUEST OF THE GOVERNOR, entitled:                                                                                           
                                                                                                                                
          "An Act making supplemental appropriations, capital                                                                   
          appropriations, and other appropriations; making                                                                      
          reappropriations; amending appropriations; repealing                                                                  
          appropriations; and providing for an effective date."                                                                 
                                                                                                                                
was read the first time and referred to the Finance Committee.                                                                  
                                                                                                                                
Governor's transmittal letter dated January 30:                                                                                 
                                                                                                                                
Dear President Kelly:                                                                                                           
                                                                                                                                
Under the authority of Article III, Section 18 of the Alaska                                                                    
Constitution, I am transmitting a bill relating to supplemental                                                                 
appropriations for the State's operating and capital budgets for Fiscal                                                         
Year 2017 (FY 2017).                                                                                                            
                                                                                                                                
A limited number of requests that were not anticipated when the                                                                 
FY 2017 budget was considered during the 2016 legislative session is                                                            
being submitted for your consideration. Medicaid, Corrections                                                                   
Physical Health Care, a settlement between the Department of                                                                    
Transportation and Public Facilities and the U.S. Environmental                                                                 
Protection Agency, constitute the largest portion of the supplemental                                                           
request.                                                                                                                        
                                                                                                                                
A request for a health insurance rate increase proposed but not funded                                                          
last year is also included. As anticipated, and in spite of cost savings                                                        
measures, the plan experienced health care and pharmaceutical cost                                                              
increases as similar to those experienced throughout Alaska and the                                                             
nation as well as increased utilization. Examples of cost saving                                                                
measures include: improved network savings, increases to the                                                                    
employee share of costs, increased deductibles and out-of-pocket                                                                
limits, review and elimination of dependents no longer eligible,                                                                
employee option to decline insurance coverage, limited choice to only                                                           
two plans, and renegotiated pharmacy contracts. Additional costs                                                                

2017-02-01                     Senate Journal                      Page 0151
saving measures are in progress. Without this rate increase the Group                                                           
Health and Life Benefits fund is projected to be exhausted by January                                                           
2018. Given recent budget reductions agencies cannot absorb these                                                               
cost increases.                                                                                                                 
                                                                                                                                
Thank you for your consideration of this bill.                                                                                  
                                                                                                                                
Sincerely,                                                                                                                      
/s/                                                                                                                             
Bill Walker                                                                                                                     
Governor